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German Factory Orders Rebound On Foreign Demand

(RTTNews) - Germany's factory orders rebounded in August as the decline in domestic demand was fully offset by robust foreign demand.

Factory orders grew a more-than-expected 2 percent month-on-month in August, reversing a 0.9 percent drop in July, figures published by Destatis revealed Friday. Orders were forecast to rise 0.8 percent.

Domestic orders fell 2.9 percent, while foreign orders increased 5.8 percent in August on the previous month.

Within foreign demand, new orders from the euro area were down 2.2 percent, but orders from other countries increased 11.1 percent.

The economy ministry said the strong increase in orders from non-European countries proves that German industrial products continue to be in demand worldwide, regardless of trade conflicts.

The ministry added that the positive economic trends in the manufacturing sector should resume in the fourth quarter.

Escalating trade tensions or an unexpected slowdown of the Eurozone economy could easily harm German industry, Carsten Brzeski, an ING DiBa economist, said.

However, as orders books are still filled, the risk of any imminent slowdown is low and up to now, the German economy has successfully defied trade tensions, Brzeski noted.

On a yearly basis, manufacturing orders declined 2.1 percent, following July's 0.8 percent decrease. Economists had forecast a 3 percent drop for August.

Data showed that turnover in manufacturing edged up 0.1 percent on the month, in contrast to a 1.3 percent drop in July.

Another report from Destatis revealed that producer price inflation rose to a near 1-year high of 3.1 percent in August from 2.9 percent in July. Economists had forecast prices to climb again by 2.9 percent.

Monthly growth in producer prices improved to 0.3 percent in August from 0.2 percent in July. The rate was expected to remain unchanged at 0.2 percent.
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